Beige Book in the Classroom

Beige Book discussion questions and suggested answers

What is the Beige Book?

The Beige Book is a report on the nation’s current economic conditions that is published eight times a year by the Federal Reserve. Each of the 12 Federal Reserve Bank districts gathers anecdotal information on its region’s economy through reports from Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by district and industrial sector. The summary of the 12 districts’ reports is prepared by a designated Federal Reserve Bank on a rotating basis. Read more 

Study Questions: Beige Book, published April 2014

  1. Characterize the overall national economic activity reported by the 12 Federal Reserve districts in the April 2014 Beige Book.
    • Reports from the 12 Federal Reserve districts suggest economic activity increased in most regions of the country since the previous report. The expansion was characterized as modest or moderate by the First, Third, Fifth, Sixth, Ninth, Tenth, Eleventh and Twelfth districts. The Seventh District reported that economic growth had picked up and the Second and Third districts indicated that business activity had rebounded from weather-related slowdowns earlier in the year. The Fourth and Eighth districts both reported a decline in economic activity. Consumer spending increased in most districts as weather conditions improved and foot traffic returned. Auto sales were up in the Second, Third, Fifth, Sixth, Seventh, Ninth, and Twelfth districts, but they were little changed from a year earlier in the Tenth and Fourth districts. Assessments of tourism were positive, activity was mixed at non-financial services firms and the transportation sector generally strengthened in recent weeks. Manufacturing improved in most districts, reports on residential housing markets varied and agricultural reports were mixed.
  2. Describe the contrasting conditions in retail sales in the Second and Fourth districts.
    • Retail sales in the Second District rebounded strongly from weather-depressed levels, while cold weather continued to hold down consumer spending in Cleveland.
  3. Describe the positive tourist activity that some of the districts experienced since the previous report.
    • In the Third, Fifth, and Ninth districts ski resorts reported an outstanding season. The Sixth District reported positive tourist activity and the Tenth District noted that activity picked up. Some districts were already experiencing heavy summer bookings.
  4. Discuss how the Fifth District in particular had an interesting and unusual travel and tourism season.
    • In Washington D.C., tourist traffic for the Cherry Blossom Festival started in March and was described as robust, even though cold weather pushed the peak bloom time to the second week of April. An executive at a Virginia resort reported that his facility had the longest ski season in their history this winter with higher than typical occupancy. However, spring break bookings have shortened as schools make up winter class cancellations and summer vacations are being booked for a week later than normal this year.
  5. Employers in several districts reported difficulties finding workers in various fields. Explain.
    • Employers in the Second, Fifth and Seventh, districts mentioned a need for workers in the IT field; employers in the Sixth District noted a need for truckers; the Tenth District cited labor shortages for skilled positions; and the Eleventh District reported that a food manufacturer found skilled labor in short supply.
  6. How did the harsh winter weather expose limitations in U.S. natural gas distribution infrastructure in the Sixth District?
    • Demand was high and there was ample supply of natural gas, however transportation and distribution of gas was limited by weather. In order to meet demand, power plants that typically operate with natural gas were forced to revert to coal.
  7. Describe overall economic activity in the Fourth District.
    • Overall economic activity in the Fourth District declined slightly in the past six weeks. The severe winter weather appears to have negatively impacted business activity to a heightened degree; some producers and service providers are still experiencing lingering effects. Demand for manufactured products grew at a slow rate. Building contractors reported that their pipelines remained active, while field work slowed. Retailers and auto dealers experienced disappointing sales during February and into March. In the energy sector, shale gas production stayed at a high level, while coal output trended lower. Hiring was sluggish across industry sectors.
  8. What impact did the severe weather have on motor vehicle sales and inventory in the Fourth District?
    • The number of new motor vehicles sold in February fell sharply compared to January figures. The decline was attributed to the persistently cold weather. New-vehicle inventories remain slightly elevated, which was credited to the extreme weather.
  9. Describe the types of credit that were in demand in the Fourth District during this period.
    • Demand for business credit began to pick up after a slow start earlier in the year. Requests were strongest for commercial real estate development, including multifamily housing, equipment financing, mergers and acquisitions. Consumer credit demand stayed on a slow upward trend.
  10. What does the Beige Book say about capacity utilization in the Fourth District’s manufacturing sector?
    • Several contacts noted that their capacity utilization rates rose during the past six weeks, but are still within a normal range.

The Twelve Federal Reserve Districts
United States with links to websites of the Federal Reserve Districts

The Federal Reserve officially identifies Districts by number and Reserve Bank city.

In the 12th District, the Seattle Branch serves Alaska, and the San Francisco Bank serves Hawaii. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of Governors revised the branch boundaries of the System in February 1996.

First District: Boston Second District: New York Third District: Philadelphia Fourth District: Cleveland Board of Governors Board of Governors Fifth District: Richmond Sixth District: Atlanta Seventh District: Chicago Eighth District: St. Louis Ninth District: Minneapolis Tenth District: Kansas City Eleventh District: Dallas Twelfth District: San Francisco Twelfth District: San Francisco